Follow the Money—But Where?

Relative to American sports—with salary caps soft and hard, revenue sharing and collective bargaining, amnesty clauses and franchise tags—soccer is a model-free market.

ENLARGE

Samuel Eto'o's contract in Russia wouldn't be worth as much if he were playing in France instead.
Associated Press

Clubs can theoretically spend as much as they want on salaries. They don't trade contracts so much as they physically buy and sell players for cash. Parity isn't a goal, and there's no entry draft along biblical lines—the last shall be the first and the first shall be the last—which means that failure isn't rewarded with top picks. So teams generally operate because of rational self-interest rather than some top-down notion of collective good.

The relative merits of the two models can and have been debated endlessly. Needless to say, the success of both the tightly regulated NFL and the laissez-faire soccer leagues suggest that both can work. It's more a question of the strength of the product and the characteristics and expectations of its fans.

But there's one area where American sports remain way ahead in terms of satisfying the criteria for a free market with perfect competition: information.

Anyone with a search engine and an Internet connection—even dial-up will do—can discover exactly the value and length of every player's contract in the major U.S. sports leagues. Apart from MLS, soccer is an entirely different story.

Whenever you see a salary or transfer fee quoted, it won't be official in any way. It's the result of a reporter's work. At best, the source will be the club (or clubs in the case of a transfer) and the agents involved speaking on background to the press. Reporters will then cross-reference their amounts with the other parties involved and hope nobody is lying. At worst, when the sources contradict each other, it's an educated guess.

The only time you get official numbers is when clubs file their company accounts. Yet even those aren't particularly helpful. They only list cumulative salaries and, in some cases, the number doesn't only include players, but also coaches, executives and other employees. Transfer fees are logged, but not itemized. And they're often done on a cash basis, which only muddies the waters when a club decides to pay for its new center forward in installments.

It's a monument to opacity. The situation is further confused by the fact that tax rates vary across Europe. The top bracket in the Premier League, for example, is 50% on income above 200,000 pounds ($316,000). In Russia, for foreign nationals, there's a 13% flat rate. In France, if President
François Hollande
follows through on his campaign pledge, it will be 75% on anything over 1 million euro ($1.25 million).

What does this mean? The take-home pay of a soccer player grossing $10 million could be as little as $2.8 million in France and as much as $8.7 million in Russia.

By the way: This alone should be a concern to UEFA and its Financial Fair Play regulations. When some clubs benefit more than others from a generous tax policy, but they're competing for the same players in the same continental competitions like the Champions League, it isn't exactly a level playing field. Then again, if the European Union can't achieve tax harmony, how is UEFA supposed to do it?

Further muddying the muddied waters is the way wages are expressed and reported in the media. In Germany, it's often done in monthly gross terms. In the U.K., it's weekly gross terms, a legacy dating to the heyday of miners and factory workers. In Italy and Spain, it's annual net terms.

The upshot is that too often the media ends up comparing apples and oranges. But with such limited information in a jungle of contrasting tax regulations, there's only so much reporters can do.

Don't expect more transparency anytime soon. League officials cite concerns over privacy and the need to maintain a competitive advantage as reasons they're not forcing clubs to disclose salary and transfer details. The privacy argument seems somewhat spurious: The media happily reports that information anyway, albeit based on guesswork and leaks. As for the competitive advantage, it isn't much of a factor when you consider that a poachable player's agent is just one phone call away.

When leagues have tried to introduce more transparency, it has smacked of lip service. In England, for example, there's now a policy requiring clubs to disclose the amount paid in fees and commissions to agents. It says virtually nothing, because it isn't itemized and the transfer fees aren't made public.

When it comes to transparency, soccer could learn a lot from U.S. sports. But at the risk of being cynical, there's a reason why there is little interest in changing the status quo. The current system allows clubs and managers to spin their transfer and contract activity any way they like. Without accurate salary and transfer data, there are no metrics to assess who is doing a good job and who isn't. The kind of statistical analysis that has overtaken American sports is growing in soccer, but the free-flowing nature of the game makes its growth and reliability difficult. And without the crucial ingredient of how much somebody actually costs, it's even harder for any outsider to draw coherent conclusions.

As the game's decision makers are lambasted over the radio, on the Internet and in traditional media, it's especially ironic that most of the scrutiny comes from faulty and incomplete data. And it's frustrating that this suits them just fine.

—Gabriele Marcotti is the world soccer columnist for The Times of London and a regular broadcaster for the BBC.

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